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5 Advantages of Personal Loans to fund Higher Education

Gone are the days when many talented and hardworking students had to do away with their education dreams owing to financial crunch in the family. Today, students want to get the best of everything. They are not only smart with technology but also with planning their finances and making sure they achieve their goals. Every year we see a tremendous increase in the number of applicants for higher education universities and an even greater increase in the number of students migrating abroad for their future studies. In light of this, it has become very important to plan our finances wisely and not let money be a barrier to their educational goals.

While there are many banks, credit unions, and private online lenders which provide Education loan for this purpose, here are some reasons why one must apply for a personal loan online for higher education. 

Easy to apply

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Unlike Education Loans which require a lot of documentation and formalities for verification purposes, one can apply for a personal loan very conveniently with minimum formalities as it does not any verification but only basic hassle-free paperwork. One needs to present the fee brochure, receipts, admission slips, and many other documents to avail a personal loan. However, since personal loan, as its name suggests, can be used for any personal work, it does not require so much documentation. Many private lenders provide personal loans with attractive features such as unlimited withdrawals and flexible repayment plans. Also applying for a personal loan is a very quick task. With limited documentation requirements, this is one of the quickest ways to avail of a loan

No collateral

Personal loans have a good number of advantages over Education loans. One of those is that personal loans are unsecured loans. This means that an individual applying for a personal loan does not have to worry about providing the bank or credit union with any collateral security or guarantor. This loan can be provided without collateral or guarantor. However, if one applies for an Education loan, one needs to have a co-applicant, either one’s parents or spouse, and a third party guarantor in case the loan amount is more than INR 4 lakh. This amount may vary from institution to institution

Multiple uses

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While a student goes for higher education, the tuition fee is not the only cost that she/ he has to bear. There are multiple other expenses such as food, accommodation, travel, and a lot more which need to be funded. Besides providing for the tuition fee, one can utilize the funds withdrawn from personal loans for all such additional expenses. Not only is one allowed to use this money for education but can also allocate some or all of it for one’s house renovations, medical bills, etc. This facility is not available if one applies for an Education loan since an education loan only provides for the tuition fee. Other expenses such as accommodation need to be borne by the individual personally. So for an individual seeking financial assistance for all the expenses in addition to the tuition fee should consider going for a personal loan

Disbursement of the Funds

When an individual applies for a personal loan, the funds are transferred in her/ his personal bank account. This again provides one with the flexibility to use this amount as per one’s personal circumstances. One can use a part of this amount in education and the other part in shopping, traveling, or anything else. This is a major advantage of a personal loan over an education loan because when one applies for an education loan, the funds, which are no more than the tuition fee, get transferred to the college/ university’s financial aid office

No Eligibility Constraints

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An education loan demands a lot from the students to declare them eligible for a loan. However, one can still avail a personal loan in such cases. Some of the situations when one may be ineligible for an education loan but eligible for a personal loan are:

    1. Recent Graduate: In case one has just passed out of college and is planning to start his business in the interim time before one starts with one’s higher studies, a personal loan can help with both his financial requirements
    2. Course Ineligibility: Banks and Unions providing Education loans have a predetermined list of courses and colleges, for which the loans can be provided. In case a student seeks admission in a course/ university which does not fall under this list, availing of a personal loan is the best option

 

All in all, for students planning to go for their higher education, should apply for personal loans in case they want to provide for all the expenses they might incur in a different city or country. Education loans do have several benefits such as decent interest rates and the availability of the moratorium period. However, the amount sanctioned in an education loan is just as much as to fund the tuition fee and does not provide funds for any other expense. There are various banks and lenders with multiple attractive plans, one must make sure to make a well-informed decision as per one’s requirements. Additionally, you can also opt for a personal loan with SC and check https://www.sc.com/in/loans/personal-loans/ for its features and benefits

About Suzan Vega

Suzan Vega

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